Microsoft launches Xbox Music: What you need to know

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Let’s face it, Zune is a joke—literally. It was a punchline on The Simpsons just last week. Although many of the Zune products earned high marks from the press, the brand has become the poster child for “that me-too gadget nobody really wants.” Rather than put more weight behind a failed brand, Microsoft decided to kill the Zune player and service, preparing to replace it with Xbox Music. Now, the launch of the new service is imminent, and we spent some time with Microsoft to discuss what's new. Xbox Music seems to be a strong competitor to other digital music services, but it has one significant problem: With strong ties to Xbox and Windows 8, its initial reach will be quite limited. Here’s everything you need to know about the new Xbox Music service.

Xbox Music is not Zune, but it is built from Zune

Xbox Music shares the back-end catalog of music and videos from Microsoft’s still-operating Zune service. The catalog now consists of 30 million tracks worldwide (over 18 million in the United States), with a small subset of those available only for purchase (no streaming allowed). Features such as SmartDJ are making the transition to the new service, along with a modified version of the Zune Pass subscription. The number of markets has expanded to 24. It’s full of familiar Zune touches, including rotating collages of big artist photography as you play tracks.

Not everything from the old Zune service is coming over to Xbox Music. Podcasts are absent from the Xbox Music catalog, since Microsoft believes that podcasts are best left to dedicated podcast apps and services. The $15-a-month Zune Pass is dropping to $10, but the “get ten free songs per month to own forever” part is gone, too.

The service has three price tiers

The vast majority of songs in the service are available for streaming, free of charge. You’ll just have to put up with a commercial, including both an audio and visual component, every 15 minutes or so. As music services go, that’s not bad. At launch, the free serivce will be availabe in 15 markets (geographical regions).

For $10 per month, the Xbox Music Pass lets you get rid of the ads, and allows you to mark tracks for download so that you can play them offline on PCs or mobile devices. Note that downloading for offline play is not available on the Xbox 360, but you can still get your music ad-free. Microsoft will be offering a 30-day trial of the Music Pass (an improvement from the 14-day Zune Pass). This service will be available in 22 markets at launch.

Last but not least, you can buy individual tracks or albums just as you can on iTunes and other popular music stores. Costs are said to be in line with those of other major stores, with most top tracks costing $1.29, and discounts for buying whole albums. Buying tracks is available only on PCs and mobile devices, and you can do so using either a credit card or Microsoft Points. The store will be availalbe in the same 22 markets as the Xbox Music Pass service.

It’s initially all about Xbox, Windows 8, and Windows Phone 8

Xbox Music will be the default music application appearing front and center on every Windows 8 PC’s Start screen. It’s a Modern UI app, meaning that it doesn’t run on the traditional desktop and is fully built for touch. Windows 8 will be available in a lot more countries than the limited markets Xbox Music will service, and on those other PCs and tablets Xbox Music will simply function as a player for local music. The Windows 8 app, which is really your best entry to the storefront, will ship along with Windows 8 (or as an update to the music app for those who already have it) on October 26. Microsoft says it will continue to expand the regions where the Xbox Music services are available from the 15/22 previously mentioned.

Xbox Music replaces Zune in the Xbox 360 fall dashboard update.

Beginning this week, Xbox 360 users will get the new fall dashboard, which includes Xbox Music. On the console, the service is all about streaming your library from the cloud—you have no way to purchase music or to go offline, as you’re required to be connected to Xbox Live. The Xbox 360 version includes a “Smart VJ” feature for music videos, and of course is fully Kinect enabled. Unfortunately, the Xbox 360 experience requires and Xbox Live Gold subscription. This seems short-sighted to me. Whether they're trying to increase their base for generating ad revenue or trying to get more people to fork over $10 a month for the paid service, you'd think reaching all those free Xbox Live users would be a priority. Limiting the service to the Xbox Live Gold members feels like being double-charged.

Xbox Music will ship as part of Windows Phone 8 as well, becoming available when those phones hit the market. We’ll hear more about the exact release dates at a Windows Phone 8 event on October 29.